Innovex International, Inc.

Previous wording

The following discussion and analysis of the results of operations, financial condition and liquidity position of Innovex for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with (i) the accompanying unaudited Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report and (ii) the audited Consolidated Financial Statements and related notes for the year ended December 31, 2024 included in our Annual Report. The following discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about Innovex’s business and operations, and involves risks and uncertainties. Actual results may differ materially from those currently anticipated and expressed in such forward-looking statements because of various factors, including those described in the sections titled “Risk Factors” in our Annual Report and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and “Cautionary Statement Regarding Forward- Looking Statements” and elsewhere in this Quarterly Report, all of which are difficult to predict. Innovex does not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. References in this section to “Innovex,” the “Company,” the “Combined Company,” “we,”“us” and “our” are to Innovex International, Inc.(formerly known as Dril-Quip, Inc.) and its consolidated subsidiaries after giving effect to the Merger and related transactions, unless the context otherwise requires or as otherwise indicated. Except as otherwise indicated, references herein to “Dril-Quip” are to Dril-Quip, Inc. prior to the completion of the Merger.

Current wording

The following discussion and analysis of the results of operations, financial condition and liquidity position of Innovex for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with (i) the accompanying unaudited Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report and (ii) the audited Consolidated Financial Statements and related notes for the year ended December 31, 2024 included in our Annual Report.

Previous wording

We are a global company, and forthe six months ended June 30, 2025, the U.S. and Canadian onshore (“NAM”) market made up approximately 52% of our revenue while the international and offshore (“International and Offshore”) markets constituted 48%. Within the NAM market, we have a strong presence in both the United States and Canada. The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region. Our products have broad applicability in this market, particularly for horizontal or unconventional wells that have become prevalent methods of oil and natural gas development across the region. We are focused on significantly increasing our revenue from the International and Offshore markets, as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a key source of growth for Innovex. We also operate across Asia, Latin America, Europe and the Gulf of America, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners.

Current wording

We are a global company, and forthe nine months ended September 30, 2025, the U.S. and Canadian onshore (“NAM”) market made up approximately 53% of our revenue while the international and offshore (“International and Offshore”) markets constituted 47%. Within the NAM market, we have a strong presence in both the United States and Canada. The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region. Our products have broad applicability in this market, particularly for horizontal or unconventional wells that have become prevalent methods of oil and natural gas development across the region. We are focused on significantly increasing our revenue from the International and Offshore markets, as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a key source of growth for Innovex. We also operate across Asia, Latin America, Europe and the Gulf of America, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners.

Previous wording

Our business has produced strong returns on invested capital. Refer to “Non-GAAP Financial Measures” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the six months ended June 30, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 6%, 10% and 20% of revenue, respectively. Over the same period, capital expenditures accounted for only 3% of revenue, and we earned approximately $44.5 million in income from operations. For the six months ended June 30, 2024, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 10%, 14% and 24% of revenue, respectively. Over the same period, capital expenditures accounted for only 2% of revenue, and we earned approximately $35.4 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion. Refer to “Non-GAAP Financial Measures” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, as well as a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.

Current wording

Our business has produced strong returns on invested capital. Refer to “Non-GAAP Financial Measures” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the nine months ended September 30, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 10%, 15% and 19% of revenue, respectively. Over the same period, capital expenditures accounted for 4% of revenue, and we earned approximately $106.8 million in income from operations. For the nine months ended September 30, 2024, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 26%, 5% and 22% of revenue, respectively. Over the same period, capital expenditures accounted for 1% of revenue, and we earned approximately $22.2 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion. Refer to “Non-GAAP Financial Measures” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, as well as a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.

Previous wording

Refer to Note 3. Mergers and Acquisitions of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information with respect to the Merger and the Company's recent acquisitions.

Current wording

Refer to Note 3. Mergers and Acquisitions of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for information with respect to the Company's recent acquisitions.

Previous wording

On April 21, 2025, we entered into a purchase and sale agreement (the “Purchase Agreement”) with BIG Acquisitions LLC (the “Purchaser”), to sell our Eldridge facilities located at 6401 North Eldridge Pkwy, Houston, Texas 77041 (the “Property”) as described in the Purchase Agreement. The purchase price for the sale of the Property is $95.0 million, subject to adjustments.

Current wording

On September 23, 2025, we completed the sale of our Eldridge facilities located at 6401 North Eldridge Pkwy, Houston, Texas 77041 (the "Eldridge Facility") to BIG Acquisitions LLC. The purchase price for the sale of the Eldridge Facility was $90.0 million, subject to adjustments. Innovex has also entered into a short-term lease of the Eldridge Facility following the closing of the sale, which extends through the end of 2025, at a rate of $650,000 per month. The short-term lease allows for the completion of ongoing facility consolidation initiatives, ensuring no disruption to customer deliveries.

Previous wording

The oil and natural gas industry has historically been characterized by volatility in commodity prices and in the level of drilling and production activity, which are driven by a variety of market forces, including geopolitical instability, climate related initiatives, OPEC+ actions, among others. The global demand for oil and natural gas has consistently increased historically, and we believe that multiple years of under investment in oil and natural gas development has left the industry with a limited amount of spare production capacity. Additionally, public E&P operators have adopted a more conservative approach to capital spending in response to stockholders’ desire for increased return of capital. We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term.

Current wording

The oil and natural gas industry has historically been characterized by volatility in commodity prices and in the level of drilling and production activity, which are driven by a variety of market forces, including geopolitical instability, climate related initiatives, OPEC+ actions, among others. We expect that the growing energy demands of data centers, driven by the prevalence of Artificial Intelligence, will continue to contribute to the consumption of natural gas for power generation. The global demand for oil and natural gas has consistently increased historically, and we believe that multiple years of under investment in oil and natural gas development has left the industry with a limited amount of spare production capacity. Additionally, public E&P operators have adopted a more conservative approach to capital spending in response to stockholders’ desire for increased return of capital. We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term.

Previous wording

Our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, due to recent and future acquisitions. One way in which we have grown, and will continue to grow, our operations and financial results is through strategic acquisitions. In May 2023, Legacy Innovex acquired 20% of DWS, a company that manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. In March of 2024, Legacy Innovex entered into the Merger Agreement with Dril-Quip, and the Merger was consummated on September 6, 2024. In November of 2024, we acquired the remaining 80% equity interest in DWS. In February 2025, we acquired SCF, a Canadian-domiciled entity and parent company to SCF Machining Corporation Vietnam Company Limited, a Vietnam-based company. In May 2025, we acquired Citadel, a leading provider of differentiated downhole technologies. As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting for the acquisition, any debt incurred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations. As a result of our acquisitions and the consolidation of our operating subsidiaries’ into the Company’s financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ. Additionally, as a result of the Merger, we expect to incur recurring administrative expenses related to being a publicly traded corporation that are not reflected in the historical Legacy Innovex’s financial statements.

Current wording

Our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, due to recent and future acquisitions. One way in which we have grown, and will continue to grow, our operations and financial results is through strategic acquisitions. In May 2023, Innovex Downhole Solutions, Inc. ("Legacy Innovex") acquired 20% of Downhole Well Solutions, LLC ("DWS"), a company that manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. In March of 2024, Legacy Innovex entered into an Agreement and Plan of Merger (the "Merger Agreement") with Dril-Quip, and the transactions contemplated under the Merger Agreement (the "Merger") were consummated on September 6, 2024. In November of 2024, we acquired the remaining 80% equity interest in DWS. In February 2025, we acquired SCF Machine Corporation ("SCF"), a Canadian-domiciled entity and parent company to SCF Machining Corporation Vietnam Company Limited, a Vietnam-based company. In May 2025, we acquired Citadel, a leading provider of differentiated downhole technologies. As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting for the acquisition, any debt incurred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations. As a result of our acquisitions and the consolidation of our operating subsidiaries’ into the Company’s financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ. Additionally, as a result of the Merger, we expect to incur recurring administrative expenses related to being a publicly traded corporation that are not reflected in the historical Legacy Innovex’s financial statements.

Previous wording

Revenues. Our NAM market revenue for the three months ended June 30, 2025 was $120.0 million, an increase of $40.9 million from the three months ended June 30, 2024, primarily driven by an increase in market share and incremental business operations due to the Merger and the acquisitions of DWS, SCF and Citadel. This was offset by a reduction in drilling activity in North America due to a decline in the North American onshore rig count during the comparative period. Our International and Offshore market revenue for the three months ended June 30, 2025, was $104.3 million, an increase of $53.0 million from the three months ended June 30, 2024, primarily driven by increased business operations due to the Merger.

Current wording

Revenues. Our NAM market revenue for the three months ended September 30, 2025 was $131.9 million, an increase of $33.6 million from the three months ended September 30, 2024, primarily driven by an increase in market share and incremental business operations due to the acquisitions of DWS, SCF and Citadel. This was offset by a continued reduction in drilling activity in North America due to a decline in the North American onshore rig count during the comparative period. Our International and Offshore market revenue for the three months ended September 30, 2025, was $108.1 million, an increase of $54.6 million from the three months ended September 30, 2024, primarily driven by increased business operations due to the aforementioned acquisitions.

Previous wording

Cost of revenues, exclusive of depreciation and amortization. Total cost of revenues for the three months ended June 30, 2025 was $152.5 million, an increase of $68.2 million from the three months ended June 30, 2024. The change was primarily attributable to a $29.7 million increase in personnel expense due to increased activity levels due to the Merger and a $7.7 million increase in supplies and general manufacturing expenses, with the remainder primarily attributable to our product costs.

Current wording

Cost of revenues, exclusive of depreciation and amortization. Total cost of revenues for the three months ended September 30, 2025 was $164.1 million, an increase of $64.9 million from the three months ended September 30, 2024. The change was attributable to a $20.6 million increase in personnel expense and an increase in our product costs due to an increase in sales activity.

Previous wording

Selling, general and administrative expenses. Selling, general and administrative expense for the six months ended June 30, 2025 was $61.2 million, an increase of $21.3 million from the six months ended June 30, 2024. The change is primarily attributable to a $31.2 million increase in salaries, wages and other payroll costs and a $3.7 million increase in IT, facility, and other business costs caused by an increase in headcount attributable to the Merger, offset by a $13.3 million decrease in bad debt, including the recoveries of outstanding receivables from our prior agent in Saudi Arabia.

Current wording

Selling, general and administrative expenses. Selling, general and administrative expense for the three months ended September 30, 2025 was $35.6 million, a decrease of $2.4 million from the three months ended September 30, 2024. The change was primarily attributable to a decrease in stock based compensation and bad debt of $9.1 million, offset by an increase in salaries and wages, IT costs, and R&D costs of $7.6 million driven by an increase in headcount attributable to the acquisitions of DWS, SCF and Citadel.

Previous wording

Gain on sale of assets. Gain on sale of assets for the three months ended June 30, 2025 and 2024 was $0.4 million and $0.2 million, respectively. The change was due to the sale of our Subsea Tree assets for total consideration of $10 million, resulting in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Current wording

Gain on sale of assets. Gain on sale of assets for the three months ended September 30, 2025 and 2024 was $40.9 million and $0.2 million, respectively. The change was driven by the sale of our Eldridge Facility assets, which resulted in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Previous wording

Depreciation and amortization. Total depreciation and amortization expense for the three months ended June 30, 2025 was $15.0 million, an increase of $8.4 million from the three months ended June 30, 2024. The change was primarily due to additional depreciation for assets acquired related to the Merger and our other acquisitions.

Current wording

Depreciation and amortization. Total depreciation and amortization expense for the three months ended September 30, 2025 was $15.4 million, an increase of $7.6 million from the three months ended September 30, 2024. The change was primarily due to additional depreciation for assets acquired related to our acquisitions.

Previous wording

Acquisition and integration costs. Acquisition and integration costs for the three months ended June 30, 2025 were $5.1 million, an increase of $0.7 million from the three months ended June 30, 2024. The change was due to the costs incurred in connection with the Merger and the acquisition of DWS, SCF and Citadel.

Current wording

Acquisition and integration costs. Acquisition and integration costs for the three months ended September 30, 2025 were $3.6 million, a decrease of $16.7 million from the three months ended September 30, 2024. The change was due to a reduction of costs incurred attributable to the Merger in 2024.

Previous wording

Interest expense. Total interest expense was $0.6 million for the three months ended June 30, 2025 and 2024. Interest expense is comparable during both periods due to lower average long-term debt balances during the three months ended June 30, 2025, offset by increased finance lease interest due to an increase in finance leases during the comparative periods.

Current wording

Interest expense. Total interest expense was $0.7 million for the three months ended September 30, 2025 and 2024. Interest expense is comparable during both periods due to similar average total debt and finance lease obligations during the comparative periods.

Previous wording

Other income. Total other income for the three months ended June 30, 2025 was $0.1 million, a decrease of $0.6 million from the three months ended June 30, 2024, with the change primarily being due to the net change in our foreign currency exchange gains (losses).

Current wording

Other income. Total other income for the three months ended September 30, 2025 was $0.3 million, a decrease of $0.6 million from the three months ended September 30, 2024. The change was primarily due to the net change in our foreign currency exchange gains (losses).

Previous wording

Equity method earnings. Equity method earnings consist of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee. With the purchase of the remaining 80% equity interest in DWS on November 29, 2024, we did not recognize equity method earnings in 2025. Total equity method earnings, excluding the amortization of the step up in fair value, for the three months ended June 30, 2024 was $1.1 million. The amortization of the step up in the fair value of the intangible assets acquired for the three months ended June 30, 2024 was $0.4 million.

Current wording

Equity method earnings. Equity method earnings consist of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee. With the purchase of the remaining 80% equity interest in DWS on November 29, 2024, we did not recognize equity method earnings in 2025. Total equity method earnings, excluding the amortization of the step up in fair value, for the three months ended September 30, 2024 was $1.4 million. The amortization of the step up in the fair value of the intangible assets acquired for the three months ended September 30, 2024 was $0.4 million.

Previous wording

Income tax expense. Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax expense for the three months ended June 30, 2025 was $6.9 million, an increase of $2.6 million from the three months ended June 30, 2024. The change was primarily driven by changes in our mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the quarter, and other non-deductible expenses. For the three months ended June 30, 2025, income before income taxes was $22.2 million, an increase of $8.3 million from the three months ended June 30, 2024.

Current wording

Income tax expense. Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax expense for the three months ended September 30, 2025 was $18.7 million, an increase of $21.3 million from the three months ended September 30, 2024. The change was primarily driven by changes in our mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the quarter, and other non-deductible expenses. For the three months ended September 30, 2025, income before income taxes was $58.0 million, a decrease of $22.0 million from the three months ended September 30, 2024.

Previous wording

Net income. Net income for the three months ended June 30, 2025 was $15.3 million, an increase of $5.8 million from the three months ended June 30, 2024, as a result of the factors discussed above.

Current wording

Net income. Net income for the three months ended September 30, 2025 was $39.2 million, a decrease of $43.4 million from the three months ended September 30, 2024, as a result of both the gain on bargain purchase recognized for the three months ended September 30, 2024 and the factors discussed above.

Previous wording

Revenues. Our NAM market revenue for the six months ended June 30, 2025 was $240.5 million, an increase of $80.4 million from the six months ended June 30, 2024, primarily driven by an increase in market share and incremental business operations due to the Merger and the acquisitions of DWS, SCF and Citadel. This was offset by a reduction in drilling activity in North America due to a decline in the North American onshore rig count during the comparative period. Our International and Offshore market revenue for the six months ended June 30, 2025, was $224.2 million, an increase of $125.8 million from the six months ended June 30, 2024, primarily driven by increased business operations due to the Merger.

Current wording

Revenues. Our NAM market revenue for the nine months ended September 30, 2025 was $372.4 million, an increase of $114.0 million from the nine months ended September 30, 2024, primarily driven by an increase in market share and incremental business operations due to the acquisitions of DWS, SCF and Citadel. This was offset by a reduction in drilling activity in North America due to a decline in the North American onshore rig count during the comparative period. Our International and Offshore market revenue for the nine months ended September 30, 2025, was $332.2 million, an increase of $180.4 million from the nine months ended September 30, 2024, primarily driven by increased business operations due to the aforementioned acquisitions.

Previous wording

Cost of revenues, exclusive of depreciation and amortization. Total cost of revenues for the six months ended June 30, 2025 was $316.4 million, an increase of $153.2 million from the six months ended June 30, 2024. The change was primarily attributable to a $57.0 million increase in personnel expense due to increased activity levels due to the Merger and a $16.7 million increase in supplies and general manufacturing expenses, with the remainder primarily attributable to our product costs.

Current wording

Cost of revenues, exclusive of depreciation and amortization. Total cost of revenues for the nine months ended September 30, 2025 was $480.5 million, an increase of $218.1 million from the nine months ended September 30, 2024. The change was attributable to a $77.5 million increase in personnel expense and an increase in our product costs due to an increase in sales activity.

Previous wording

Selling, general and administrative expenses. Selling, general and administrative expense for the three months ended June 30, 2025 was $28.8 million, an increase of $10.3 million from the three months ended June 30, 2024. The change is primarily attributable to an $18.3 million increase in salaries, wages and other payroll costs and a $4.1 million increase in IT, facility, and other business costs caused by an increase in headcount attributable to the Merger, offset by a $13.3 million decrease in bad debt, including the recoveries of outstanding receivables from our prior agent in Saudi Arabia.

Current wording

Selling, general and administrative expenses. Selling, general and administrative expense for the nine months ended September 30, 2025 was $96.8 million, an increase of $18.9 million from the nine months ended September 30, 2024. The change was primarily attributable to an increase in salaries and wages, IT costs, R&D costs, and facilities expenses of $33.2 million driven by an increase in headcount and business activity attributable to the acquisitions of DWS, SCF and Citadel, offset by a decrease in bad debt of $14.5 million, including the recoveries of outstanding receivables from our prior agent in Saudi Arabia.

Previous wording

Gain on sale of assets. Gain on sale of assets for the six months ended June 30, 2025 and 2024 was $0.3 million and $0.3 million, respectively. The change was due to the sale of our Subsea Tree assets for total consideration of $10 million, resulting in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Current wording

Gain on sale of assets. Gain on sale of assets for the nine months ended September 30, 2025 and 2024 was $41.2 million and $0.5 million, respectively. The change was driven by the sale of our Subsea Tree product line in June of 2025 and the Eldridge Facility assets in September of 2025, both of which resulted in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Previous wording

Depreciation and amortization. Total depreciation and amortization expense for the six months ended June 30, 2025 was $29.9 million, an increase of $18.5 million from the six months ended June 30, 2024. The change was primarily due to additional depreciation for assets acquired related to the Merger and our other acquisitions.

Current wording

Depreciation and amortization. Total depreciation and amortization expense for the nine months ended September 30, 2025 was $45.3 million, an increase of $26.1 million from the nine months ended September 30, 2024. The change was primarily due to additional depreciation for assets acquired related to our acquisitions.

Previous wording

Long-lived asset impairments. Long-lived asset impairment expense for the six months ended June 30, 2025 was $3.4 million, a decrease of $0.1 million from the six months ended June 30, 2024. The impairment expense was related to (i) land and a building in Mexico acquired as part of the Merger, that was held for sale at March 31, 2025 and marketed at an amount that was lower than the net book value, which ultimately resulted in an impairment expense of $2.9 million and (ii) declining market conditions associated with our anticipated sub-lease of the prior Dril-Quip corporate office.

Current wording

Long-lived asset impairments. Long-lived asset impairment expense for the nine months ended September 30, 2025 was $3.4 million, a decrease of $0.1 million from the nine months ended September 30, 2024. The impairment expense was primarily related to (i) land and a building in Mexico acquired as part of the Merger that was held for sale at March 31, 2025 and marketed at an amount that was lower than the net book value, which ultimately resulted in an impairment expense of $2.9 million and (ii) declining market conditions associated with our anticipated sub-lease of the prior Dril-Quip corporate office.

Previous wording

Acquisition and integration costs. Acquisition and integration costs for the six months ended June 30, 2025 were $9.4 million, an increase of $4.2 million from the six months ended June 30, 2024. The change was due to the costs incurred in connection with the Merger and the acquisition of DWS, SCF and Citadel.

Current wording

Acquisition and integration costs. Acquisition and integration costs for the nine months ended September 30, 2025 were $13.1 million, a decrease of $12.4 million from the nine months ended September 30, 2024. The change was due to a reduction of costs incurred attributable to the Merger in 2024.

Previous wording

Interest expense. Total interest expense was $1.3 million for the six months ended June 30, 2025 and 2024. Interest expense is comparable during both periods due to lower long-term debt balances during the six months ended June 30, 2025, offset by increased finance lease interest due to an increase in finance leases during the comparative periods.

Current wording

Interest expense. Total interest expense was $1.9 million and $2.1 million for the nine months ended September 30, 2025 and 2024, respectively. Interest expense is comparable during both periods due to similar average total debt and finance lease obligations during the comparative periods.

Previous wording

Other income. Total other income for the six months ended June 30, 2025 was $0.3 million, an increase of $0.2 million from the six months ended June 30, 2024, with the change primarily being due to the net change in our foreign currency exchange gains (losses).

Current wording

Other income. Total other income for the nine months ended September 30, 2025 decreased by $0.4 million from the nine months ended September 30, 2024, with the change primarily being due to the net change in our foreign currency exchange gains (losses).

Previous wording

Equity method earnings. Equity method earnings consist of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee. With the purchase of the remaining 80% equity interest in DWS on November 29, 2024, we did not recognize equity method earnings in 2025. Total equity method earnings, excluding the amortization of the step up in fair value, for the six months ended June 30, 2024 was $1.9 million. The amortization of the step up in the fair value of the intangible assets acquired for the six months ended June 30, 2024 was $0.7 million.

Current wording

Equity method earnings. Equity method earnings for the nine months ended September 30, 2024 consisted of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee. With the purchase of the remaining 80% equity interest in DWS on November 29, 2024, we did not recognize equity method earnings in 2025. Total equity method earnings, excluding the amortization of the step up in fair value, for the nine months ended September 30, 2024 was $3.3 million. The amortization of the step up in the fair value of the intangible assets acquired for the nine months ended September 30, 2024 was $1.1 million.

Previous wording

Income tax expense. Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax expense for the six months ended June 30, 2025 was $13.5 million, an increase of $4.1 million from the six months ended June 30, 2024. The change was primarily driven by changes in our mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the quarter, and other non-deductible expenses. For the six months ended June 30, 2025, income before income taxes was $43.6 million, an increase of $8.2 million from the six months ended June 30, 2024.

Current wording

Income tax expense. Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax expense for the nine months ended September 30, 2025 was $32.2 million, an increase of $25.3 million from the nine months ended September 30, 2024. The change was primarily driven by changes in our mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the quarter, and other non-deductible expenses. For the nine months ended September 30, 2025, income before income taxes was $101.6 million, a decrease of $13.8 million from the nine months ended September 30, 2024.

Previous wording

Net income. Net income for the six months ended June 30, 2025 was $30.1 million, an increase of $4.1 million from the six months ended June 30, 2024, as a result of the factors discussed above.

Current wording

Net income. Net income for the nine months ended September 30, 2025 was $69.3 million, a decrease of $39.2 million from the nine months ended September 30, 2024, as a result of both the gain on bargain purchase recognized for the nine months ended September 30, 2024 and the factors discussed above.

Previous wording

Our primary sources of liquidity are our existing cash, cash provided by operating activities, and borrowings under the Credit Facility. The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors. As of June 30, 2025, we had cash and restricted cash of $68.8 million and availability under the Revolver (as defined herein) of $110.4 million. Our total indebtedness was $40.7 million as of June 30, 2025.

Current wording

Our primary sources of liquidity are our existing cash, cash provided by operating activities, and borrowings under the Credit Agreement (as defined below). The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors. As of September 30, 2025, we had cash and restricted cash of $163.4 million and availability under the Revolver (as defined herein) of $132.8 million. Our total indebtedness was $26.4 million as of September 30, 2025.

Previous wording

We have certain obligations related to debt maturities, finance leases and operating leases. As of June 30, 2025, we have $22.2 million of minimum non-cancelable lease obligations for the twelve months following June 30, 2025, comprised of $6.7 million of finance lease maturities and $15.5 million of operating lease obligations. We have an additional $63.7 million of minimum non-cancelable lease obligations for the periods after June 30, 2026, comprised of $7.8 million of finance lease maturities and $56.0 million of non-cancelable operating lease obligations. As of June 30, 2025, interest rates on our lease obligations range from 2.88% to 12.00%. In addition, as of June 30, 2025, all amounts borrowed under our Revolver become due and payable in 2030. For the three months ended June 30, 2024, the Company’s effective interest rate on the term loan was approximately 9.95%. For the three and six months ended June 30, 2025, the effective interest rate on the Revolver was approximately 5.63% and 6.94%, respectively. For the three and six months ended June 30, 2024, the effective interest rate on the Revolver was approximately 11.71% and 9.69%, respectively. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Current wording

We have certain obligations related to debt maturities, finance leases and operating leases. As of September 30, 2025, we have $23.7 million of minimum non-cancelable lease obligations for the twelve months following September 30, 2025, comprised of $7.9 million of finance lease maturities and $15.8 million of operating lease obligations. We have an additional $78.6 million of minimum non-cancelable lease obligations for the periods after September 30, 2026, comprised of $25.8 million of finance lease maturities and $52.8 million of non-cancelable operating lease obligations. As of September 30, 2025, interest rates on our lease obligations range from 2.88% to 12.00%. In addition, all amounts borrowed under our Revolver become due and payable in 2030. For the nine months ended September 30, 2024, the Company’s effective interest rate on the term loan was approximately 8.85%. As of September 30, 2025, there were no borrowings under the term loan. For the nine months ended September 30, 2025, the effective interest rate on the Revolver was approximately 8.92%. For the nine months ended September 30, 2024, the effective interest rate on the Revolver was approximately 10.46%. As of September 30, 2025, there were no borrowings on the Revolver. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Previous wording

Operating Activities. Net cash provided by operating activities for the six months ended June 30, 2025 was $90.3 million, an increase of $54.9 million from the six months ended June 30, 2024. The change was primarily driven by the following:

Current wording

Operating Activities. Net cash provided by operating activities for the nine months ended September 30, 2025 was $138.7 million, an increase of $81.6 million from the nine months ended September 30, 2024. The change was primarily driven by the following:

Previous wording

an increase in net income of $4.1 million;

Current wording

a decrease in net income of $39.2 million;

Previous wording

changes in non-cash adjustments to net income from the comparative period as a result of a $18.5 million increase in depreciation and amortization, in connection with the increased size of the business primarily due to the Merger and other acquisitions between July 1, 2024 and June 30, 2025, a $14.2 million increase in deferred taxes due to timing differences, and a $2.2 million increase in amortization of operating lease right-of-use assets; and

Current wording

changes in non-cash adjustments to net income from the comparative period, including an increase in (i) depreciation and amortization expense of $26.1 million, (ii) deferred taxes due to timing differences of $30.5 million, (iii) amortization of operating lease right-of-use assets of $3.5 million, and (iv) gains on property, equipment disposals of $40.6 million, offset by a decrease in the gain on bargain purchase associated with the Merger of $96 million; and

Previous wording

the remaining change is primarily due to the changes in operating assets and liabilities, net of assets acquired as part of the acquisitions.

Current wording

the movement in operating assets and liabilities, net of assets acquired as part of the acquisitions.

Previous wording

Investing Activities. Net cash used in investing activities for the six months ended June 30, 2025 was $86.3 million, an increase of $83.0 million from the six months ended June 30, 2024. The change was primarily due to the cash used to fund both the SCF and Citadel acquisitions.

Current wording

Investing Activities. Net cash used in investing activities for the nine months ended September 30, 2025 was $8.8 million, an increase of $159.2 million from the net cash provided by investing activities for the nine months ended September 30, 2024. The change was primarily due to the cash used to fund both the SCF and Citadel acquisitions, offset by the proceeds from sale of the Eldridge Facility, for the nine months ended September 30, 2025 versus the cash acquired as part of the Merger for the nine months ended September 30, 2024.

Previous wording

Financing Activities. Net cash used in financing activities for the six months ended June 30, 2025 was $11.0 million, a decrease of $18.0 million from the six months ended June 30, 2024. The change was primarily due to a decrease in net repayments of long term debt of $29.3 million, offset by common stock repurchases of $9.3 million for the six months ended June 30, 2025.

Current wording

Financing Activities. Net cash used in financing activities for the nine months ended September 30, 2025 was $42.1 million, a decrease of $72.1 million from the nine months ended September 30, 2024. The change was primarily due to a decrease revolving credit facility borrowings and amounts paid for both dividends and taxes on settled equity awards of $80.4 million, offset by common stock repurchases of $9.3 million for the nine months ended September 30, 2025.

Previous wording

The Company, as the borrower, entered into the Credit Agreement, dated as of February 27, 2025, to replace the Previous Credit Agreement and provide for a revolving credit facility of up to $200.0 million (the “Revolver” and, together with the Term Loan, the “Credit Facility”). The Credit Agreement, among other things, (a) extended the maturity of the agreement from June 10, 2026 to February 27, 2030, (b) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (c) eliminated the term loan commitment and (d) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Current wording

The Company, as the borrower, entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement, dated as of February 27, 2025, to replace the Previous Credit Agreement and provide for a revolving credit facility of up to $200.0 million (the “Revolver” or the “Credit Agreement”). The Credit Agreement, among other things, (a) extended the maturity of the agreement from June 10, 2026 to February 27, 2030, (b) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (c) eliminated the term loan commitment and (d) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Previous wording

The Company is subject to various financial and non-financial covenants under the Credit Agreement, including limitations on the incurrence of debt, granting of liens, investments, dividends, asset sales, and affiliate transactions and, if at any time an Event of Default (as defined in the Credit Agreement) has occurred and is continuing or if Excess Availability (as defined in the Credit Agreement) is less than 20%, a requirement to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00. As defined by the Credit Agreement, the fixed charge coverage ratio represents the ratio of Adjusted EBITDA (as defined in the Credit Agreement), less certain capital expenditures, dividends and tax payments, to all scheduled debt payments during the applicable period.

Current wording

The Company is subject to various covenants under the Credit Agreement, including limitations on the incurrence of debt, granting of liens, investments, dividends, asset sales, and affiliate transactions. Additionally, if at any time an Event of Default (as defined in the Credit Agreement) has occurred and is continuing or if Excess Availability (as defined in the Credit Agreement) is less than 20%, the Company must maintain a fixed charge coverage ratio of not less than 1.10 to 1.00. As defined by the Credit Agreement, the fixed charge coverage ratio represents the ratio of Adjusted EBITDA (as defined in the Credit Agreement), less certain capital expenditures, dividends and tax payments, to all scheduled debt payments during the applicable period.